The September 2015 issue of Inc. magazine is devoted to the “Inc. 500 – the 500 Fastest Growing Private Companies in America.” Over the next several postings, I’ll try to glean some wisdom from the leaders of the Inc. 500 companies . . . try to discern what they believe made them successful. But first, let’s talk about entrepreneurship in general. Inc. has collected some statistics which, taken together, outline what we might call the “traditional” path to entrepreneurship. You may be interested in learning whether your entrepreneurial journey followed this “traditional” path, or followed a path entirely of your own making. If so, please continue reading below.
Entrepreneurship by the numbers. How do you measure up?
Growing up, almost 2/3 of the Inc. 500 founders had parents, siblings, or other extended family members who were entrepreneurs.
88% hold college degrees or higher.
Over 2/3 of those founders started their first business before their 30th birthday.
60% of all Inc. 500 founders have started more than one business, and 76% of all have never had to close a business.
57% of Inc. 500 companies were founded by their CEO, while an additional 36% we’re started by co-founders. Of those co-founded companies, 43% of the co-founders were close friends . . . only 14% were co-founded by family members.
Over 2/3 of Inc. 500 founders say their founding team is still intact.
58% of Inc. 500 founders started their first business with less than $10,000. 86% have never used venture capital funding. Apparently a debt averse crowd, 71% started with their own personal savings.
24% of Inc. 500 CEOs waited three years or more before drawing a paycheck.
Only about 1/3 of Inc. 500 companies came to market with a unique product or service that didn’t exist before. The remaining 2/3 began by bringing improvements to existing products or services.
89% sell their products or services to other businesses while only 34% sell to consumers.
Where did Inc. 500 founders decide to locate their new company? 44% chose a location near friends and family. 30% were influenced by a pre-existing customer base. 19% wanted to be in a community friendly to startups, or where there was a concentration of similar businesses.
Now remember, these stats are taken from what Inc. magazine believes are the top 500 entrepreneurial companies in the country . . . the best of the best. If we were to look at the same stats for all privately held, entrepreneurial companies, we would probably see some significant differences. Still, if you want to compare yourself to something, wouldn’t you want to compare yourself to the best?
In the next several postings we’ll look at some of the Inc. 500 leaders . . . at their behavioral traits, their leadership styles, and at what they did (or didn’t do) to earn a place in this very elite group of companies. Stay tuned.